Our markets
H&M meets the customer through three complementary sales channels: the stores, the Internet and the catalogues. The most important of these is the stores. It is here that the customer can see what is new, try on and feel the items, get ideas for putting outfits together and be inspired. The stores are a shop window for the range and must attract the customers.
Here is the first store in Shanghai – as always, in the best location.
The aim is for H&M stores always to be located in the best business location, whether in a big city or a shopping centre. This has been a firm principle of H&M since the first store opened and is still true today. H&M stores can for example be found on Fifth Avenue in New York, on Regent Street in London, on Corso Vittorio Emanuele in Milan and on Queen’s Road in Hong Kong.
The fact that H&M leases all the store premises is an advantage. It makes it easier to move a store to another site if the best business location in a city changes.
H&M has stores for different locations and customers
H&M offers a wide range of stores – everything from big full-range stores to small concept stores. The stores vary in size from a few hundred square metres to several thousand square metres. In 2007 the number of new and refurbished stores reached a record high. In addition, the standard of these stores was raised to make them more attractive and thereby further reinforce H&M’s competitive strength.
In 2007 H&M also opened a new store chain – COS Collection of Style – with a new fashion concept in a higher price segment to attract a different customer group.
Internet and catalogue sales complement the stores
For more than 25 years H&M’s customers in the Nordic countries have been able to shop from home using catalogues, and since 1998 also via the Internet. The strength is freedom of choice – the customers can choose the sales channel that suits them best at that moment.
Expansion of Internet and catalogue sales outside the Nordic region
In autumn 2006 H&M began a roll-out of Internet and catalogue sales outside the Nordic region. The first new country was the Netherlands, with Internet sales. In spring 2007 the first H&M catalogue was sent out to customers in the Netherlands in a initiative that has produced good results so far. In late July 2007 it was time to take the next step, with the launch of Internet sales in both Germany and Austria, and the first German-language catalogue was issued in January 2008.
What all these markets have in common is that they are major catalogue markets with a high level of Internet penetration and well developed broadband networks.
Catalogues create interest in the collections
Although more and more Internet and catalogue sales customers are making their purchases online, the catalogues remain important. Each year H&M produces four large catalogues – two in the spring and two in the autumn. These are supplemented by smaller seasonal catalogues with a particular focus.
The catalogues are sent out at the beginning of the season and generate interest in the new collections. The range is more or less the same as in our stores. The catalogue inspires customers and provides an overview of the full range, while also providing tips and ideas. It is then up to the customer to choose in each case where he or she wants to shop – in store, using a catalogue or by ordering online.
H&M growing through all the sales channels
H&M is continuing to grow through all three sales channels. Although the stores are H&M’s primary sales channel, Internet and catalogue sales strengthen H&M’s profile and increase the level of service to customers, thereby making H&M even more accessible. In the future, customers in more and more H&M countries will be able to shop online and using the catalogue, although the Group’s main expansion will take place through stores.
Best business location is crucial for expansion
The best location is crucial when establishing a successful store. H&M prefers not to open a store until the right business location becomes vacant. Every individual store is unique. To create a store with the best possible commercial conditions, H&M analyses the customers on the street, the other stores nearby and the traffic flows and relates this to the circumstances of the premises. Sometimes it may be a concept store for teenagers that has greatest commercial potential, while at other times it may be a family store. The most important thing is that the format is right in each case.
Analysis before H&M moves into a new market
Before H&M decides to move into a new market, an assessment is made of the market’s potential. Factors such as demographic structure, purchasing power, economic growth, infrastructure and political risk are analysed.
An on-the-spot assessment of the customer base and store locations is then carried out. The first store should preferably be a large store in the best business location in a big city, which is subsequently supplemented with a mix of stores offering all or parts of the product range. H&M can then continue to grow by opening stores in other cities.